TECH

NASA audit criticizes KSC's largest contract

James Dean
FLORIDA TODAY

Kennedy Space Center has paid more than $460,000 in questionable fees under its largest contract, NASA auditors said Thursday.

Screen shot of Vencore's home page for Kennedy Space Center's $1.9 billion Engineering Services Contract.

NASA's Office of Inspector General described the spaceport's $1.9 billion Engineering Services Contract with Vencore Services and Solutions Inc. as complex, cumbersome and confusing.

Vencore is the lead contractor, with at least 10 partners, for a wide array of services spanning multiple programs, from work on launch infrastructure to safety analysis to management of labs including a rodent-care facility.

“The size and scope of Kennedy’s engineering contract has made managing the contract particularly challenging,” the auditors found.

They suggested NASA consider a “major change” in how KSC buys engineering services, perhaps breaking up the big contract into “smaller, more manageable contracts” with fixed prices for some services.

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The existing contract awarded in 2010 to Vencore (previously QinetiQ North America) reimburses the company for its costs and awards extra fees for good performance.

But the audit found that KSC’s performance evaluations have sometimes been too generous, resulting in $462,612 in questionable fee awards between 2011 and 2014.

Those awards resulted from vague criteria, a rating system that didn’t match federal standards and shortcomings being overlooked. For example:

  • Auditors challenged an “excellent” safety rating Vencore received in one award period despite four accidents that caused $27,000 in property damage. Only one accident should have been acceptable, resulting in a rating no better than “very good.”
  • Vencore failed to meet goals for small businesses subcontracting during four award periods, but KSC’s evaluations “do not reflect this deficiency.” NASA said the contractor had tried to meet the goals.
  • In one award period, auditors found 30 tasks had cost overruns, but NASA counted only three. “We question whether NASA accurately evaluated Vencore’s performance” for cost management, the report said.

Among the concerns the audit highlights are inexperienced NASA managers, including some responsible for task orders who “are not adequately trained and some do not appear interested in the job.”

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The report said Vencore created a guide for its own employees to help the NASA managers create and revise orders for specific tasks not covered under the base contract.

Some of NASA’s overly generous performance ratings may be tied to evaluators’ fears that low scores would reflect poorly on them or on NASA, according to the audit.

One manager said he tried to be fair but “is aware that management does not like to see low evaluation scores for the contractor.”

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KSC agreed with the audit’s four recommendations: to identify contract efficiencies, tie performance evaluation criteria to specific milestones, explore using smaller contracts, and align performance ratings with federal standards.

“We continually look to gain efficiencies on this contract and will continue to do so,” KSC Director Bob Cabana wrote in his response.

Cabana said KSC is reviewing options for how to buy engineering services if the current contract is not extended beyond February 2017. But he said the center's performance evaluations already comply with federal standards to ensure fee awards “are appropriately aligned with contractor performance.”

The Inspector General’s Office disagreed. saying KSC’s plans for improving evaluation criteria and ratings were insufficient and that a "more proactive approach is necessary."

Contact Dean at 321-242-3668 orjdean@floridatoday.com.And follow on Twitter at@flatoday_jdeanand on Facebook atfacebook.com/jamesdeanspace.